Monday, December 19, 2016

With December 31 fast approaching, now is a good time to review tax planning actions that you have already taken this year and to discuss with your tax adviser other things you may be able to do before year-end to further reduce your 2016 income taxes.

If you will be in a lower tax bracket in 2017, it may be prudent to defer some of this year’s income until next year and to pay deductible items that you would normally pay in early 2017 before December 31, 2016.

Business and professional people who use the cash accounting method may be able to defer the receipt of income by not billing until year-end for services rendered in 2016. The receipt of a bonus that your employer is free to give or not give can be deferred into next year to lower your 2016 compensation income.

Pay real estate taxes and the January 15 installment of state and local income taxes before December 31 to accelerate these deductible items into the 2016 tax year. If possible, pay all medical bills, if the total will exceed 7.5% of your adjusted gross income, before year-end to be able to use that expense as a deduction, if you itemize.

Another income tax deduction that is very easy to accelerate is the charitable deduction. You have total control on when this deduction will be available; all you have to do is complete your charitable gifts before December 31.

Make time for year-end tax planning with your advisers; it can beneficial to you and to the charitable causes you wish to support.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Wednesday, December 14, 2016

Have you given much thought to what your legacy will be? Most of us desire to make a difference in the lives of our loved ones. We take steps to ensure they will be taken care of when we are no longer here on this earth. Through proper financial estate preparation we are able to provide this care. But have you also thought about memorializing your Christian faith through the written statement of your last will and testament?

Estate documents present a wonderful opportunity to leave behind a written testimony of your faith in Christ. Evangelist Dwight L. Moody’s Will contained this great example as a lasting expression of his eternal confidence in Christ. “You may have heard that I died. Nothing could be further from the truth. I am alive and well, enjoying the presence of God for eternity. It’s my hope that you will take great joy in my recent promotion. It’s also my prayer and request that if you haven’t discovered the truth about God sending His son to die on the cross so that none should perish, you will seek His truth with great urgency as a personal favor to me.” Another enduring, clear statement was left by Patrick Henry, one of America’s Founding Fathers, who said, “If I had all the goods this world can offer but had not faith in Christ, I would amongst all men be poor indeed.”

You can create your own letter to loved ones, affirming and encouraging them. Consider joining the many Christians who, as a part of their estate planning, have made such statements either by incorporating them into the text of their planning documents, or in letters to be found with their documents following their death. Such statements would be treasured and serve as a witness to those you leave behind.

The staff of the Kentucky Baptist Foundation are available to you for a private, confidential estate stewardship and legacy planning consultation. To request a consultation, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

Richard Carnes is the president of the Kentucky Baptist Foundation, PO Box 436389, Louisville, KY 40253; toll-free (866) 489-3533; KYBaptistFoundation.org.The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

Friday, December 2, 2016

Scripture and life experiences teach that there are important differences between capital and income. Income is earned on a regular basis and is spent meeting daily needs. Unspent income typically becomes part of our capital and is invested in savings accounts, houses, retirement accounts, businesses and more. We work hard to accumulate sufficient capital over our working years to enable us to live off the income the capital produces when we cease working to earn a regular salary.

Another word for capital might be “endowment”. An endowment is simply a collection of assets that are invested to produce income that can be used for personal or charitable purposes. We most commonly think of endowment as financial assets and investments, but the Old Testament contains significant examples of God using capital to advance His Kingdom. In reading Genesis 41 we learn of a time early in Israel’s history when God used Joseph to advise the king of Egypt to store grain in anticipation of a looming seven years of famine. God inspired Joseph, and this grain storage became an endowment that kept the people from starvation. From this saved population descended the Savior of the world.

As we evaluate what God has entrusted to us in the way of capital assets within our estates, we must acknowledge the three possible destinations for our assets. We can transfer assets to loved ones, to Christian ministries that have significantly impacted our lives, or we can endow the U.S. Government through taxes paid to the Internal Revenue Service. Fortunately, many faithful Baptists are looking at the ministries of their churches and prayerfully considering what God is inspiring them to do. Individuals can help sustain Christian ministries during a time when their local church may experience a “famine” of financial support for regular ministry efforts.

To make intentional plans to care for your families and the ministries God is inspiring you to support, the Kentucky Baptist Foundation is a resource to call upon. If you have questions or desire a private estate stewardship consultation, please contact the Foundation’s trust counsel, Laurie Valentine, or me at our toll-free number (866) 489-3533.

The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.

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